This post may contain affiliate links, which means I may earn a small commission if you make a purchase through them — at no extra cost to you. I only share products and tools I truly love and recommend!

Prefer to listen instead of read? Listen to the related podcast episode here, or find it on your favorite platform:

Running your own retail store is undoubtedly a thrilling journey filled with fashion, style, and (mostly) fun things. But let's face it – tax season can be a bit daunting. Today I'm here to talk to you about just ONE of your tax obligations as a business owner – filing & sending any required 1099 tax documents.

But what does that even mean? And who needs to receive a 1099?

In simple terms, a 1099 is a tax form that reports amounts you've paid to others, outside of employee wages. Sending 1099s is your way of letting the IRS know that you paid certain individuals or businesses for services that THEY need to pay taxes on.

Essentially, you’re helping the IRS make sure these individuals & businesses don’t commit tax fraud.

So who needs to receive a 1099?

Don't stress out – you don't need to send a 1099 to EVERYONE you've paid throughout the year. There are 4 different criteria that they must meet:

1. You paid them $600+ during the calendar year (this threshold is increasing beginning with payments made in 2026)
2. You paid them for services, rent, or interest
3. You paid them via cash, check, ACH, or a personal payment processor (Personal Venmo, Zelle, Paypal Friends & Family, etc…)
4. They do NOT file taxes as a corporation

If a vendor reaches the first 3 criteria, then you will need to request a copy of their W-9 to determine if they meet the 4th one. (Here's a blank copy you can print and send them, if they need it) Be sure to keep their W-9 somewhere safe because you will need the information provided on that form to file their 1099.

The only exception to that last requirement is lawyers – they need a 1099 even if they’re taxed as a corporation.

When do you need to file these?

Mark your calendars, because the deadline for sending out those 1099 forms is January 31st.

When you file your OWN tax return to report your business income & expenses, you will be asked if you filed all required 1099s. If you say no, you could be charged fines. And, if you say yes if you really didn’t…well, that’s lying on a federal document…which is illegal. So don’t do that.

How do you file and send the 1099s?

Depending what the payments were for will determine the type of 1099 you send the vendor. And while there are actually over 20 different types of 1099 documents, most/all of the payments you make will probably fall under these 3:

• A 1099-NEC (i.e. Non-Employee Compensation) needs to be sent to the vendors that meet the requirements and were paid for a service
• A 1099-MISC needs to be sent to the vendors that meet the requirements and were paid for rent
• A 1099-INT needs to be sent to the vendors that meet the requirements and were paid interest.

You are able to request free blank copies of these forms from the government, but I typically recommend using a software to help. I use one called Tax1099, but Quickbooks Online also has the ability to e-file these documents as well. Using a software will ensure the copies get sent to both your vendor & the IRS.

Otherwise, if you’re not comfortable doing this yourself, many bookkeepers & Accountants offer this for a small fee.

---

Remember, organization is your best friend, and staying on top of your bookkeeping records throughout the year will make this process easier for you! If you need a better system to help you keep track of your business finances, then I would love to welcome you inside of our Bookkeeping Made Simple for Boutiques community!

This course will teach you how to track every single penny flowing through your business using Quickbooks Online so you can easily run the reports you need to see which vendors are meeting the first 3 requirements of a 1099. You can learn more and enroll here.